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Everyday Loans automates IFRS 9 modelling with Horizon
01 August 2017
Gaining rapid compliance with the IFRS 9 regulations is a key focus for Everyday Loans, which recognises the need to comply without wanting to engage on a lengthy and complex delivery project. Horizon will help them to meet this challenge by applying Jaywing’s proven methodology using Everyday Loans’ own data within a hosted software environment, dramatically cutting the amount of design, test and deployment effort that would otherwise be required in a typical modelling project.
Jaywing has extensive experience of developing IFRS 9 models for clients, having worked with 14 leading UK lenders to define, deliver and execute their regulatory models. Through this experience, Jaywing has developed a consistent methodology which it has encapsulated in the Horizon software.
Using advanced machine learning techniques, Horizon produces constantly refreshed, always optimal models based on client data, which only requires users to have a good knowledge of their portfolio, rather than an in-depth knowledge of modelling. Using low-impact data aggregations from existing sources, and with the client’s portfolio knowledge informing a choice of parameters, the software fulfills a requirement to take a proportionate approach, building in the key requirements of the regulation such as the appropriate consideration of a variety of economic scenarios, stress testing, and handling stage allocation.
The system will enable Everyday Loans to achieve compliance at a quicker pace than building it themselves, well in advance of the target date.
Everyday Loans’ Head of Credit Risk, Jason Bovington, said: “We were impressed by the ability of Horizon to automate the required modelling activities and produce provision calculations and other outputs that we need in order to be compliant with the regulations. IFRS 9 had the potential to represent a mandatory, large-scale modelling and delivery project during a period where we also have other business priorities. We quickly realised that by using Jaywing’s software we could rely on their expertise and cut the time we’d need to focus on this delivery. Horizon is cost-effective, gives us the models we need, frees up our analytical resource, and produces a completely refreshed set of optimised models each time it runs”
We are proud of the ground-breaking approach that Horizon represents in this unique product. Artificial Intelligence and Machine learning is set to become an increasing part of the scoring and modelling landscape, and in Horizon we have deployed our advanced modelling expertise in a web-hosted software product that will make it easy for Everyday Loans to meet IFRS 9 requirements. I am delighted to partner with them on this contract.